Joshua Bacchus, CPA, CFP®, CLU®
Financial Advisor, Mortgage Agent Level 1

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Personal Wealth and Finance

Estate Tax: Planning Wisely

November 1, 2025

Tax Planning is Legal: Canadians can legally arrange finances to minimize income tax.

Tax Issues to consider:
- RRIF Withdrawals: Increases your tax burden and may result in an Old Age Security (OAS) clawback.
- Provincial Tax Rate: Living in a high-tax-rate province results in higher taxes.
Provincial Residency Rule: Determined by where a person resides on Dec. 31, which may affect your estate taxation.

Common Tax Shelters: RRSPs, TFSAs, RESPs, FHSAs, and principal mortgage payments.

Unspent RRIF Withdrawals:
- Best Option: Add to a TFSA if room is available.
- Alternative: Accumulates in a non-registered account, leading to tax on distributions, probate tax, and likely increased OAS clawback.
RRIF Withdrawal Strategy: Minimum RRIF withdrawals often result in a larger after-tax estate due to the tax-free compounding that occurs within the RRIF.
- The tax advantage of RRIF/RRSP is often overlooked.
- Don’t focus solely on the final tax; have a financial planner compare minimum vs. larger withdrawals for estate size.

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